US: Retroactive duties could be applied to Chinese solar imports

The controversy surrounding the U.S.-China trade debate looks set to continue well into 2012. Having already twice delayed the deadline for its preliminary decision on Chinese solar import duties into the U.S., the Department of Commerce has now introduced a "critical-circumstances" ruling, meaning that retroactive duties could be applied.

The US-China trade case is set to be a hot topic in 2012.

Flickr/yunheisapunk

Reportedly the first time that Commerce has issued a ruling ahead of a preliminary countervailing-duty determination, the critical-circumstances mean that, if duties are introduced, they will be retroactively applied to all Chinese photovoltaic cell and module imports, which entered the U.S. from December 3, 2011.

Commerce is expected to reach a decision on anti-subsidy (countervailing) duties on March 2, and on anti-dumping duties on March 27. According to the Coalition for American Solar Manufacturing (CASM), "Commerce will issue a separate critical-circumstances ruling in the anti-dumping investigation." It adds that on December 2, the U.S. International Trade Commission reached a "unanimous" preliminary determination that Chinese solar imports are harming the U.S. solar manufacturing industry.

Those for the trade case are reportedly requesting that tariffs of up to 250 percent be applied.

In response to the news, Björn Emde, Suntech's communication manager Europe told pv magazine, "It is not uncommon for the U.S. Department of Commerce to preliminarily find critical circumstances; importantly, the decision must first be confirmed by the U.S. International Trade Commission before becoming effective. More importantly, we are greatly concerned about the dangers this process poses to the U.S. solar industry."

Threatening

In related news, an economic analysis, commissioned by the Coalition for Affordable Solar Energy (CASE) and carried out by the Brattle Group, has reportedly found that a 100 percent tariff applied to Chinese crystalline solar products coming into the U.S., would result in up to 50,000 net lost jobs in the country over the next three years. It adds that "retaliatory" tariffs imposed on U.S. imports of polysilicon to China could affect around 11,000 American jobs in the first year, following the introduction of the tariffs.

The group outlines the scenarios it envisages under two tariff levels of 50 percent and 100 percent. "We find that a 50 percent tariff will shut the vast majority of Chinese imports out of the U.S. market, and a 100 percent tariff will effectively block them altogether," it says.

These employment impacts, it continues, are forecast to create one of two scenarios: either a situation where there is low demand elasticity and high supply elasticity, or vice versa. Based on these, it envisages that average module prices will be 25 to 30 percent higher than current projections over the next three years, thus affecting domestic demand; job and economic losses will result; and the Chinese government could retaliate.

In response to the analysis, Gordon Brinser, president of SolarWorld Industries America Inc., stated, "This highly speculative study ignores the illegality of China’s actions and fails to consider the harm those actions have caused to high-tech manufacturing jobs in the solar sector. We do know that thousands of good-paying American manufacturing jobs have already been lost to illegal Chinese dumping and subsidies for solar products."

He added, "Two years ago, the resellers of Chinese tires put out a very similar study, claiming that for every U.S. manufacturing job saved by the Section 421 trade action then being investigated, anywhere between 12 and 25 jobs at tire retailers would be lost. This never happened. There is no reason to believe that CASE’s study on behalf of dumped subsidized Chinese imports will prove to be any more accurate."

Interestingly, he concluded by saying, "We don't want to rely on unstable foreign countries for our supply of oil. Why should we want to rely on illegal imports from China for our supply of solar energy?"